Productivity Commission draws on UNSW research in childcare shake-up

The Productivity Commission has put UNSW research at the centre of its proposed childcare shake-up, adopting key principles from a Social Policy Research Centre (SPRC) submission in its review.

Professor Deborah Brennan from the SPRC said the Commission adopted three central positions from her submission, co-authored with PhD student Elizabeth Adamson, including the notion of a single means-tested payment, a sliding scale that includes high earners but gives the most benefit to low-income families and the introduction of a link between subsidies and ‘reasonable costs’.

“We are delighted that key concepts and policy design principles that we’ve developed at SPRC have been taken up in such an authoritative report,” said Prof Brennan, who chaired a 2012 review of early childhood education funding for the NSW government and is one of Australia’s leading family and work researchers.

“Some of our ideas were quite new when we put them forward in our submission. The notion of reasonable costs, for example, was our formulation and it had never been used in the childcare policy debate before so it was really good to see that in there.” 

In its draft report published this week the Productivity Commission proposed a single means and activity-tested subsidy paid direct to the parents’ chosen provider, for up to 100 hours a fortnight.

The Commission also recommended expanding the subsidy to cover nannies and removing the cap on occasional care places, as well as requiring primary schools to provide after-hours care, including for preschoolers.

Professor Brennan said the draft was a “good platform for debate and discussion”, though she expressed concern about children whose parents aren’t in the workforce being excluded from support in a bid for savings.

“The Commission has said, well if something has to give it’s going to be children whose parents are not in the workforce,” she said. “From the research we’ve done at the Social Policy Research Centre that’s a really retrograde step.

“These are really vulnerable children – it’s often children whose parents have a mental illness and don’t work or are very demoralised or who have very low skills. It’s a sensible long-term investment to get those kids into early childhood education and care.”

Setting the stage for a debate on the government’s proposed Paid Parental Leave (PPL) scheme, the Commission questioned whether it would provide significant additional benefits to the broader community and said there “may be a case” for diverting its funds to early childhood education and care.

Professor Brennan said she expected there to be a lively debate on the PPL, which she described as a contentious issue.

“It is disproportionate to be spending 5 or 6 billion dollars on parental leave which lasts for 6 months and the same amount on child care which lasts for the next 12 years. It doesn’t make sense.”

The Commission’s draft report is open for submissions until September 5, with public hearings slated throughout August. The final report is due by October 31.

Professor Deborah Brennan - one of Australia’s leading family and work researchers